Will Bitcoin ever become less volatile?

Ladislav Krištoufek ()

Finance Research Letters, 2023, vol. 51, issue C

Abstract: We examine the drivers of Bitcoin volatility and discuss possible future developments, specifically what conditions need to be met for the volatility to decrease. Our instrumental variables analysis implies there needs to be a considerable inflow of small users into the system who are ideally not exchange traders and they do perform small transfers. Increasing exchange volume, on-chain transfers value, and Bitcoin price by themselves increase volatility of the cryptoasset.

Keywords: Cryptocurrencies; Cryptoassets; Bitcoin; Volatility; Store of value (search for similar items in EconPapers)
JEL-codes: E42 G15 G23 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:51:y:2023:i:c:s1544612322005311

DOI: 10.1016/j.frl.2022.103353

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